Tom Lesch, head of the US debt practice, wrote a piece examining the lack of debt capital in the cannabis sector for cannabis-focused publication MJBiz.
Cannabis is booming. Legal consumer demand is outpacing even the rosiest of projections, and the race to gain market share is happening at breakneck speed.
But the lack of debt capital available to fund projects is curtailing expansion. Commercial banks, with the exception of state-chartered banks, have been hesitant to lend, while traditional debt funds have shied away from the sector because of their investors’ policies.
As long as cannabis remains federally illegal, finding institutional debt capital to support the sector will remain challenging.
Luckily, a new class of lenders has emerged to fill the void.